Sony isn’t just betting on the PlayStation 5

Sony CEO Kenichiro Yoshida spelled out the Japanese company’s plans in video games during a speech at Sony’s corporate strategy meetings related to its year-end earnings report. In that speech last night, he noted that the company will invest heavily in first-party games for the PlayStation 5 that deliver immersive and seamless experiences for gamers.

That means that gamers don’t have to worry about whether Sony will continue to invest in big exclusives like The Last of Us Part II and Ghost of Tsushima for the PS5, which launches during the holidays. But Yoshida said that Sony’s gaming future goes beyond what players can do on their couch playing the latest Sony hardware. It is also trying to reach more people through cloud gaming, remote gaming, and mobile experiences.

What’s interesting to me is that Sony is thinking more expansively about games, and it isn’t just focused on the PS5 for its future. We’ve known this for a while, but it’s informative to see it reinforced by Sony’s relatively new CEO, who took the helm two years ago and doesn’t speak that often.

In the year ended March 31, Sony reported $21.34 billion in revenues for its game division, with $2.87 billion of operating income. The PlayStation 4 has reached 100 million units sold to date and 94 million monthly active users for its PlayStation Network online gaming service. It also has 41.5 million PlayStation Plus subscribers. That’s the core of Sony’s user base, and it enabled Sony to have the world’s second-largest game business, behind only China’s Tencent.

Immersive and seamless

Above: Unreal Engine 5 demo shows what a PS5 game can look like in 2021 or later.

Image Credit: Epic Games

Sony’s PS5 will have dramatically better computational performance, measured in teraflops, compared to the PS4, Yoshida said. And he also touted the solid-state drive (SSD), which is faster than a hard drive and will enable Sony to make games that are a hundred times faster than the previous generation.

That will immerse gamers in huge worlds with seamless transitions from scene to scene, and long load times should be a thing of the past. Sony is also investing more in a haptic game controller that gives you more touch feedback, as well as 3D audio so you can sense what’s happening around you in a virtual world.

He said the lineup for the PS5 will be announced soon. The core strength of Sony’s business will come from sales of games for the PS4 and the upcoming PS5. And that provides the core revenues of Sony’s gaming business. But Sony isn’t stopping with its traditional console business.

Beyond the PS5

Above: Sony’s Remote Play grew 2.5 times in the past year.

Image Credit: Sony

Yoshida also said that users will be able to take games purchased on disc or via the network for TV use and play them anytime, anywhere. He credited that improvement in the experience to better smartphones, better networks such as the upcoming 5G networks, and new game services.

The core services here are Remote Play, which uses a PS4 console in your home as a server that streams games to other devices, and PlayStation Now, a cloud-gaming service that lets you play games that you haven’t downloaded and are streamed to your PS4.

Remote Play has been around since 2006, while PlayStation Now had its roots in 2012 with the acquisition of Gaikai, which developed game streaming and compression technology. Sony launched PlayStation Now as a service in 2014.

Remote Play streams the games on the PS4 via Wi-Fi to any room in the home, using the PS4 as a game server. This worked in the past with PC and Sony Xperia smartphones, but in March, Sony added iOS to reach a larger user base. Yoshida said that Remote Play will be expanded to Android smartphones as well. The PS5 will support Remote Play as well. Remote Play usage grew 2.5 times from December 2018 to December 2019.

Above: PlayStation Now doubled during the past year.

Image Credit: Sony

PlayStation Now has been slow to take off, but Yoshida said it reached a record 2.2 million subscribers in the most recent quarter, compared to a million a year ago. No doubt it grew in part because of shelter-in-home conditions that have helped demand for all games. PlayStation Now’s selling point is its capability to let players discover new games by testing new titles under a single subscription fee.

“Over the last five years, we have verified that gamers do see value in the service, and we have accumulated technology and patents to minimize latency,” Yoshida said.

He said Sony will add more games, including triple-A titles, to the service, and will make it accessible via 5G technology. Sony has allied itself with Microsoft on game streaming technology, as it can tap Microsoft’s huge investment in datacenters and its Azure cloud service to execute on cloud gaming services.

Lastly, Yoshida said the company would continue to invest in mobile games, which have become the biggest part of the game industry, through developers Aniplex and ForwardWorks.

What this means is that Sony is embracing the totality of games, able to compete with Google Stadia and Microsoft’s Project xCloud. And Sony isn’t putting all of its eggs in the PS5 basket. Again, we knew this. But it’s good to see that Sony’s new CEO is bringing it up as a way of saying “We aren’t forgetting about all the other things we do to expand the market for games more broadly.”

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